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TMI Blog2021 (4) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,261.00 as transit sales covered under 'C' and 'E1' Forms and the transit sales include sales made to M/s.Neyveli Lignite Corporation Limited [NLC], Neyveli. The Assessing Officer stated that the respondent dealer has purchased goods by way of interstate transaction for the said project executed by them and transferred to M/s.NLC and claimed exemption as transit sale and also collected tax from M/s.NLC. Further, it was stated that the dealers have received payment from M/s.NLC for the design engineering services and claimed exemption stating that it was the receipt for supervision work at Neyveli. Stating that the dealer has not furnished the copy of the agreement entered with M/s.NLC, it was proposed to deny exemption claimed on transit sale and also to levy tax on the turnover pertaining to design engineering charges. The respondent dealer furnished the details of the invoices pertaining to purchase from M/s.ABB Limited, Bangalore who in turn had purchased the materials from local dealers based in Chennai and the materials were directly dispatched by the local dealer to M/s.NLC. Further, M/s.ABB Limited has mentioned in their invoice about the dispatch from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h they had claimed exemption and hence it is conclusively established that the turnover is taxable in the State. Further the first appellate authority and the Tribunal erred that the dealer had paid service tax which is not acceptable in view of the fact that in the invoices raised by the dealer on M/s.NLC no service tax was levied excluding three invoices dated 06.07.2006, 31.07.2006 and 30.08.2006 which contain the details of service tax charged by them whereas the other invoices did not contain entries about the service tax collection by the dealers and hence it should be taken as that the dealer had not paid service tax for those invoices. Therefore, the transaction cannot be termed as pure labour work since the dealer did not charge for service and hence the levy of Central Sales Tax made on the dealer is perfectly in order. Further, it is submitted that the transit sale portion also the respondent dealer had collected tax and hence exemption claimed by them is not admissible. It is further submitted that the dealer had entered into agreement with M/s.NLC which is a composite agreement for design engineering, transportation, furnishing, supply, erection and commissioning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of exemption by relying upon Form C declaration issued by M/s.NLC where the excise duty and sales tax reimbursed has been shown separately. This led to the inference that the dealer had effected taxable sale with collection of sales tax but had camouflaged the taxable sales as sales in transit falling under Section 6(2) of the CST Act and claimed exemption. An audit objection by CAG led the Assessing Officer to reach such a conclusion. The explanation given by the dealer is that the amount shown in Form C declaration as sales tax represents the reimbursement of CST paid on purchase in chain of transactions and this is in terms of the agreement entered by the dealer with M/s.NLC. The dealer contended that as per the terms of agreement entered into with M/s.NLC, the CST transactions should be by way of sale in transit and that the sales tax [CST] paid in the chain of transactions would be reimbursed at actuals subject to ceiling fixed in the price schedule. The first appellate authority on going through the assessment records held that the Assessing Officer has not rejected the claim of exemption on the ground that the impugned transaction do not fall within the scope of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax whereas he had not rejected the declaration Form filed in support of the claim for exemption made on transit sales under Section 6(2) of the CST Act. Thus we find that the Tribunal rightly appreciated the factual position while upholding the order passed by the Appellate Authority and we find that the revenue has not made out any ground to interfere with the order passed by the Tribunal. The contentions advanced by the learned counsel appearing for the dealer is well supported by the decision of the Division Bench of this Court in the case of Sundaram Industries Limited vs. The State of Tamil Nadu [2012 (50) VST 147(Mad)] and the relevant portion of the judgment reads as follows: "14.When the parties to the contract have agreed on a consolidated price inclusive of tax, it is clear that irrespective of how they make up the bill or the accounts, the entire consideration will be the turnover, and in which event, the question of application of Explanation (1-A) to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, does not arise. In the above-said aspect, this Court, in the unreported decision in W.P. No. 37025 of 2002, by order dated 1.4.2004, clearly held that how an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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